White space. Designers, illustrators, painters, and anyone else with a creative bent knows the value of white space. It’s that portion of a page without graphics and it can be valuable to the eye.
Apple’s huge cash hoard is like white space. There’s plenty of it, but the visual focus isn’t on the white space, it’s on what Apple is doing. So, let me look at what Apple is not doing.
What Doesn’t Meet The Eye
White space can often take up more space in the visual than a product, or text, or an image, yet white space is not where the eye focuses first.
When it comes to Apple’s money, we tend to focus on what Apple plans to do with it all. Buy back stock. Issue dividends. And, uh, what else?
So far, Apple isn’t giving a hint of what will happen to all those riches other than stock buying and dividend giving.
So, let’s look at the white space; what Apple is not doing with all that cash. Is Apple investing in new technology? For example, buying into the component makers– battery, screen, CPUs? Nope.
Is Apple investing that money by getting into finance as the world’s top gadget banker? There’s nothing to indicate that’s going on. At least, yet.
The company has enough money that it could easily finance sales of iPad and iPhone in ways that competitors never would. Nothing down, limited monthly payments, sign and go.
Apple’s iTunes App Store accounts have enough big numbers (a few hundred million users) and credit card numbers that it wouldn’t take much for the company to become a retail banker and allow your App Store account to be used for all kinds of purchases in retail outlets the world over.
Yet, there’s no sign that’s going on behind the scenes, either. What is Apple planning to do with all that cash other than sit on it or give it away in dividends and stock repurchases?
Apple is not buying chip manufacturing facilities. It isn’t buying the latest social media outlets (Instagram, Tumblr, Waze, et al). A company’s investments can often give us an idea of what the future might bring, but we don’t see Apple investing in much of anything at all.
Does all that visible white space mean that Apple can’t see the future?
Constable Odo says
I’m an Apple shareholder and I’m absolutely thrilled over the latest increased dividends, however… Where are all Apple’s value-added services? Where’s that robotic iPhone assembly plant? Where’s that advanced battery tech that relies on Liquidmetal? Where’s Apple’s music and video subscription services? Where’s Apple’s self-produced media content? When I think of over $100 billion dollars going to waste while the rest of the smartphone industry is just putting the pedal to the metal and yet Apple seems to have its brakes on. Apple could afford to do everything else better than 95% of the players in the tech industry, but it looks like Apple has more disadvantages going for it than advantages. It just seems like Apple has had a drought for the last nine months.
Why can’t Apple help consumers finance Apple products? Apple has more spare cash than any bank on the planet. It might as well go into business with both Visa and Mastercard. It just seems as though Apple is throwing away business and growth opportunities. Wall Street says that Apple doesn’t have a bright future and growth is so limited, why doesn’t Apple try to address some of those issues through partnerships and acquisitions to pad itself. Other companies can do it, so why not Apple. I hate to gripe because I’ve made plenty of money from owning Apple stock and certainly enjoy Apple products. It’s just that I hate seeing Google and Samsung pulverizing Apple (that’s how the news media sees it) when Apple is probably capable of pulverizing the both of them. Apple’s attitude seems so lax it just disappoints me.
lk says
Im in the same situation. Shareholder since 1992. This is what I call the silent period. Its when the media says Apple is done, out of business and drives stock down. The silence just kills everyone and the rumors start popping up good and bad. Johnathan Ives is really the heart behind Apple. If he leaves you need to SELL. With the 4k tv coming out I would bet on a Apple TV with all the Siri integration and internet. Cook has a fascination with the cartoon Jetsons. Watch the cartoon and you will see where Apple is going…..
Louis Wheeler says
We don’t know what Apple’s management is thinking. Will what you want provide an adequate return on investment? Will Apple’s assets be safe? I doubt it, given the political insecurity of the world economy.
Have you ever considered the effect on Apple when the US Dollar stops being the World’s Reserve Currency? That will occur within the next five years. Those will be turbulent times; it will be best for Apple to diversify in many countries.
Manufacture overseas will stop being advantageous for Apple when the price of foreign goods triple in the US. Apple’s management has said that it is planning to return manufacturing to the US, which will still be Apple’s largest buyer. No doubt, many technical improvements will be included in these new facilities. This move assumes that US governments will be less hostile to business than they have been. All the locations stated by Apple have been low tax and regulation, non union states. States which will not oppose a high degree of robotics. Apple is reputed to purchasing the robotic machines it sites in Chinese plants. This lowers the costs and the workforce of its suppliers.
Apple’s software initiatives, music and video subscription services, for instance, depend on the construction of huge data centers, such as at Maiden, North Carolina, Prineville, Oregon and Reno, Nevada. The former is built, but will double or triple in size. The middle one is at two thirds of a million square feet, now, but it is not fully in service yet. The latter is barely started. They only have 20 thousand square feet built, not the over a million planned. Apple’s data centers will be 100% Green. This lowers the political back lash and prevents supply disruptions from an increasing price in oil and gas.
Also, If the credit worthiness of most people will be in question in coming hard times, so why would Apple start financing purchases?
We would also disagree on the health of the Android Smartphone market. Android’s market is badly fractured by incompatible versions, rather than being monolithic the way the iPhone is. Android may sell phones, but it doesn’t sell apps. It has little user loyalty.
iggy pence says
Something is wrong at Apple. It’s as if the company has become rudderless in the wake of Steve Jobs’ death. Where are the partnerships? Where are the investments? Where are the strategic alignments? Where’s the super duper robotic manufacturing plant that cranks out Liquid Metal cases? Where’s the real innovation?
Apple is stalled. As much as I hate to say it, and I appreciate the dividends, it does look increasingly as if Apple doesn’t know what to do with itself these days. I hate to say this, too, but that was not the case under Jobs.
Jobs might be a tough act to follow, but it’s easy to see now that Apple needs a spiritual leader.
Jonny Ive for President, anyone?
Pk de Cville says
Perhaps Apple is going to take service, reliability, security, deviice hw support, and payments into moonshot territory.
The tree falling in the forest that no one heard? Apple’s rumored move frm warranty service to yearly service plans… Got Service? Apple does.
Anyone else? (Crickets)
Louis Wheeler says
Apple has a reputation for keeping quiet until it is ready to stomp on its competitors. Who is its competition? Microsoft is in steady decline. Dell is approaching bankruptcy. Samsung is not really a contender.
AdamC says
There is one question no one ask which company have experienced near death – none except Apple.
After reading the write and the comments so by all reckoning Apple not learned from their unique and would love to experience it again.
I doubt and what they had up their sleeves no one knows so let Apple prove they still have it before we throw them under tha bus.